- Dogecoin price shed 14% on January 5 as crypto markets collapsed.
- This downtrend seems to be a fractal in play, suggesting that a 20% upswing is likely.
- A four-hour candlestick close below $0.151 will create a lower low, invalidating the bullish thesis.
Dogecoin price has been under a lot of pressure as it hovers around a crucial demand barrier, a breakdown of which could see a massive crash. However, the January 5 drop seems to have given rise to a fractal that hints at a bullish outlook.
Dogecoin price at inflection point
Dogecoin price dropped 14% on January 5 as crypto markets followed Bitcoin’s footsteps. The correction for DOGE seems to have created a bullish fractal that was witnessed after the December 3 crash.
The said fractal contains a triple bottom pattern followed by a dip below the said setup to collect liquidity, leading to a massive run-up. The rally in the last run-up was massive due to Elon Musk’s tweet, but investors can expect a minor rally this time.
Assuming the optimistic narrative plays out, Dogecoin price will retest the immediate resistance barrier at $0.176 after a 14% ascent. Clearing this level will allow DOGE to tag the 50-day Simple Moving Average (SMA) at $0.187. This move will constitute a 20% advance.
DOGE/USDT 4-hour chart
Due to the recent crash, things are looking bleak for Dogecoin price. Hence, the downswing could continue without giving bulls any chance to make a comeback. If such a scenario plays out, DOGE could slide lower, producing a four-hour candlestick close below $0.151.
This development will create a lower low, invalidating the bullish thesis. In this situation, Dogecoin price could revisit the December 4 swing low at $0.129.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.